Wednesday, October 29, 2008

Project to update the estimate of the number of cancers attributable to occupational causes

An important estimate of the overall proportion of cancer attributable to occupational causes remains that put forward by Doll and Peto in 1981 in a report to the US Congress. They estimated that 4% (plausible range of uncertainty 2% to 8%) of cancer mortality was due to occupational causes. This equates to approximately 6 000 cancer deaths per year in Great Britain (plausible range 3 000 to 12 000) or 12,000 registered incident cancers (uncertainty range 6,000 to 24,000). It should be noted that the estimate includes asbestos related lung cancer and mesothelioma. Although, this estimate relates to the US over two decades ago, it remains the best overall estimate available. It is acknowledged, however, that this estimate may now be out-of-date. Consequently work is currently under contract to update and refine the estimate.

Fifty years ago, on Tuesday 29 October, the boom in the price of stocks and shares on the New York stock exchange came to an abrupt end in what has gone down in history as the Great Crash.

Stocks and shares are titles to ownership of part of a business. They entitle their owners to a percentage of the profits of that business in the form of dividends or, in the case of certain kinds of shares, fixed interest payments. In theory the price of a share reflects the value of the firm's assets. In practice it fluctuates with the firm's profit-making record and expected profits. It is this latter that introduces an element of gambling into shareholding, since the firm can never know in advance whether or not it will in actual fact make the hoped-for profits. If it doesn't then the price of its shares will fall and the shareholders will suffer a loss. If it does then the price of its shares will increase and the shareholder will receive a capital gain as well as a dividend.

A stock exchange boom is essentially a period of speculation for capital gains on rising share prices. It need have nothing whatsoever to do with the profit-making record or prospects of the firms whose shares are traded. It is enough that there is a sustained excess of buyers over sellers on the stock market. With prices continually rising, capital gains can be made simply by buying shares one day and selling them the next. A telephone call is all the effort required.

Until October 1929 there was such a boom on the New York stock exchange. Share prices were rising, and everybody expected them to go on rising. Stories of people 'getting rich quick' from buying and selling shares encouraged others to try their luck. Actually, as long as the boom continued it was not a question of luck at all but a matter of having money. If you didn't have ready cash, you could borrow the money to buy the shares. Certainly you needed some collateral, but there were cases of shares already bought on loans - and even of the shares to be bought by that loan — being accepted as collateral.

The trouble with a speculative boom of this sort is that it cannot go on for ever. Sooner or later the excess of buyers over sellers must disappear. Everybody knows this, but investors can't resist the temptation to make easy money.

The Great Crash was followed by a severe industrial depression, summarised by J.K. Galbraith in his very readable book on the subject:

“After the Great Crash came the Great Depression which lasted, with varying severity, for ten years. In 1933, Gross National Product (total production of the economy) was nearly a third less than in 1929. Not until 1937 did the physical volume of production recover to the levels of 1929, and then it promptly slipped back again. Until 1941 the dollar value of production remained below 1929. Between 1930 and 1940 only once, in 1937, did the average number unemployed during the year drop below eight million. In 1933 nearly thirteen million were out of work, or about one in every four in the labour force. In 1938 one person in five was still out of work. (The Great Crash 1929, Pelican, p. 186.)

One school of thought, the monetarists, sees the Great Crash and Great Depression as the outcome of government interference in the 'natural' workings of capitalism. According to them, the stock exchange boom and its inevitable crash were caused by the monetary policy pursued by the US government and central bank (the Federal Reserve Board). What gives monetarist explanations of this crisis, and of crises in general, a semblance of plausibility, is the fact that monetary bungling can aggravate a crisis. And there is no doubt that in the years up to 1929 the Federal Reserve Board, in pursuing a cheap money policy with easy credit and low interest rates, did encourage the stock exchange boom, and so helped make the crash all the greater when it came. A stricter monetary policy might have cut short the boom at a much earlier stage and thus prevented so great a crash, even if not a minor one, but the question is: would it also have avoided the Great Depression?

Here the answer must be no. For a slowing down of economic activity was evident in the summer of 1929, some months before the Crash (a knowledge of this must have been a factor in bringing the stock exchange boom to an end). This downturn was particularly evident in the consumer goods sector, where the firms concerned had overestimated demand and were finding themselves lumbered with excessive stocks. In other words, the depression was going to happen anyway, whether or not there had been the stock exchange boom and crash. More fundamental economic factors were at work than speculations on the stock market or the monetary bungling of the Federal Reserve Board.

An attempt to identify these fundamental economic factors using the categories of Marxian economics has been made by Sydney H. Coontz in Productive Labour and Effective Demand (1965) and by Ernest Mandel.

A depression is the result of an unbalanced growth of one sector of the economy having expanded too fast for the other sectors. Simplifying matters, the economy can be divided into two main sectors, the one producing means of production (sometimes called 'capital goods' or, more accurately, 'producer goods'), and the other producing consumer goods. The conditions for steady, balanced growth under capitalism can then be stated to be:

“The purchase of consumer goods by all the workers and capitalists engaged in producing capital goods must be equivalent to the purchases of capital goods by the capitalists engaged in producing consumer goods (including in both categories the purchases needed to expand production). The constant reproduction of these conditions of equilibrium thus requires a proportional development of the two sectors of production. The periodical occurrence of crises is to be explained only by a periodical break in this proportionality or, in other words, by an uneven development of these two sectors.” (Mandel, Marxist Economy Theory, Vol.1, p.349.)

What happened in America in the 1920s was that the producer goods sector expanded too fast for the consumer goods sector. Production and productivity increased while wages and prices remained comparatively stable. Wages did in fact rise, but the main benefits of the increase in productivity went to the capitalists in the form of increased profits. Most of these additional profits were reinvested in production (though some found their way to the New York stock exchange). It was this that led, according to figures quoted by Galbraith, to the rapid extension of the producer sector as compared with the consumer goods sector:

“During the twenties, the production of capital goods increased at an average annual rate of 6.4 per cent; nondurable consumers' goods, a category which includes such objects of mass consumption as food and clothing, increased at a rate of only 2.8 per cent.” (pp. 192-3)

An expansion of the producer goods sector at a faster rate than the consumer goods sector is not in itself a situation of disproportionate development. Indeed, it has been precisely the historical role of capitalism to build up and develop the means of production at the expense of consumption. But so-called 'production for production's sake' cannot in practice continue indefinitely, since it demands either a sustained series of new inventions and innovations or a continually expanding market for consumer goods.

The relatively full employment in America in the 1920s — unemployment was officially only 0.9 per cent in 1929 — did mean that the market for consumer goods expanded, but the falling share of wages and salaries in National Income meant that this was not going to continue. The expansion of the producer goods sector levelled off, further retracting the market for consumer goods since its workers now had less to spend. Expressed in terms of the formula for balanced growth stated above, the purchase of consumer goods by the workers (and capitalists) in the producer goods sector had come to be less than the purchase of producer goods by the capitalists in the consumer goods sector. In other words, an overcapacity had developed in the consumer goods sector, which expressed itself in an overproduction of consumer goods and the build-up of stocks. As Coontz puts it (using the language of academic economics):

“. . . stagnation in the capital goods industry, the displacement of labour in this sector, meant that worker and entrepreneurial consumption expenditures failed to rise pari passu with investment in the consumer sector. It was this disproportionality that generated the Great Depression.” (p. 154)

The Great Depression — which occurred all over the world and not just in America — was not an accident, but simply capitalism working in a normal way. It exposed capitalism for the irrational, anti-social system that it is. While millions were unemployed and reduced to bare subsistence levels, food was destroyed because it could not be sold profitably. It was in the 1930s that the Roosevelt administration introduced the notorious policy of paying farmers not to grow food, a policy accurately described by a later President, Kennedy, as 'planned underproduction'. Even in limes of boom and prosperity capitalism underproduces, but in times of depression this is even more flagrant.

The Depression eventually came to an end — with the war and preparations war.ALB(Socialist Standard, October 1979)

Saturday, October 25, 2008

It is not just Marx whose ideas are now been looked at again. So are those of Keynes. While the German Finance Minister, Peer Steinbrück, of the Social Democratic Party, has said that “certain parts of Marx’s thinking are really not so bad” (Times, 20 October) his British counterpart, Labourite Alistair Darling said (typically) “much of what Keynes wrote still makes sense” (Sunday Telegraph, 19 October). Commenting on this, Keynes’s biographer, Lord Skidelsky wrote “anyone under 40 might well have asked: ‘And who on earth is Keynes?’” (Times, 23 October). So discredited had the ideas and policies of Keynes become by the end of the 1970s.

For those under 40, John Maynard Keynes was an inter-war years economist who was at one time credited with having saved capitalism. He argued that capitalism did not automatically tend towards full employment and that government intervention to increase spending was needed to ensure this. He was himself a Liberal, but his ideas were embraced by all three main parties in Britain.

As it happened, post-war Britain did have more or less full employment for twenty or so years after the war, but this was more due to the expansion of world markets than to Keynesian “demand management” policies. When, in the mid-1970s, world market conditions changed, Keynes’s policies were shown not to work. Instead of stimulating a revival of industrial production they added a new problem - rising prices through currency inflation. In all previous slumps prices had fallen, but the implementation of Keynesian policies in the 1970s meant that they continued to rise. A new word was invented to describe the result: “stagflation”.

In Britain the funeral oration on Keynesianism (Keynes himself had died in 1946) was delivered by the then Labour Party Prime Minister, James Callaghan, at the 1976 Labour Party Conference:

“We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that that option no longer exists and that in so far as it ever did exist, it only worked on each occasion since the war by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment” (Times, 29 September 1976).

Or, as Lord Skidelsky put it, “Then Keynesian policies suddenly became obsolete and the theory that backed it was condemned to history’s dustbin”.

Socialists didn’t shed a tear. Keynes had been trumpetted as the man who had made Marx irrelevant. Labour Party thinkers (some of whom had previously claimed to be “Marxist”) argued that there was now no longer any need for a social revolution to replace capitalism with socialism; Keynes had shown how government intervention could ensure steady growth, full employment and rising living standards.

With a big slump seemingly looming, the three main parties are all turning again to Keynesian policies, calling for tax cuts, income redistribution and government spending to deal with the threat. But, if applied, the result is predictable. It will be the same as last time: stagflation.

Marx is only a rival to Keynes in the context of “reform or revolution” since he never advocated any policies to try to avoid or get out of a slump. For him the capitalist boom/slump cycle was the way capitalism worked and no government could do anything about it. So there’s no Marxist tax policy or Marxist monetary policy or Marxist interest rate policy. Marx’s only “policy” was to get rid of capitalism and production for sale on a market with a view to profit and to replace it with socialism and production solely for use and the complete disappearance of the market and market forces. That’s our policy too.

Friday, October 24, 2008

A recent issue of the magazine TIME (14 October) highlighted the immense profits to be made in capitalism even in a trade recession. " Need to start a war? No problem. While stock markets grate and financial institutions (and even whole countries, like Iceland) teeter on bankruptcy, one global industry is still drawing plenty of high-end trades and profits: weapons."

The article reported the case in a Paris courtroom where 42 officials went on trial for taking millions in kickbacks and organising huge arms commissions from the Angolan government during the mid-1990s. This group, which included a former French Interior minister,Charles Pasqua and the son of the late French President Mitterand, were charged with having supplied almost $800 million worth of arms to Angola, including 12 helicopters, 6 naval vessels, 150,000 shells and 170,000 mines.

The Angolan President Jose Eduardo Dos Santos used this huge stockpile to crush the US-backed Unita rebels during Angola's devastating civil war. It is worth noting that Dos Santos is reckoned to have made millions of dollars from the transaction and that he is still in power with no prospect of a fraud trial for him.

The source of this arms hardware was the huge stockpiles of Soviet weapons left behind when the Soviet Union collapsed. The French businessman Pierre Falcone allegedly plied Angolan officials with tens of millions of dollars - some of it stuffed in in suitcases - and deposited other sums in offshore accounts.

You might imagine that these shady dealings having been brought to light could no longer occur, but you would be dreadfully wrong. "Researchers say arms trading has boomed in the decade since the Angolagate scandal was uncovered. That's partly due to hightened supply. As ex-Soviet republics emerged as economic actors in their own right, several countries developed national arms industries, refitting weapons from their stocks and manufacturing new weapons of their own.

These industries have taken off in in recent years. Ukraine has about 6 million light weapons from Soviet stockpiles, and has modernised tanks, anti-aircraft missiles and other weaponry, says Hugh Griffiths, an expert on illicit weapons at the Stockholm International Peace Research Institute.""It is very difficult to stop arms trafficing, because there is no control," says Griffiths, who has researched Ukraine's arsenal for the US government. Although NATO funds Ukraine to destroy its stockpiles, "the Ukrainians realize how much money they can make by selling surplus weapons," he says. In an action that broke no laws, the Ukrainians shipped about 40,000 Kalashnikov rifles to Kenya last year during the tense standoff following the country's disputed presidential election."

As the struggle for oil and minerals intensifies inside capitalism we have rebel conflict in Chad, Sudan, Congo and elsewhere. This conflict needs weapons and so the arms trade legitimate or otherwise flourishes. In Africa and all over the world capitalism reigns supreme. The basis of capitalism is production for profit, so in its remorseless drive for profit it leads to conflict, and eventually armed conflict.

It is the nature of the beast to maim and kill and all attempts to civilise it by such grandiose titled groups like the Stockholm International Peace Research Institute are doomed to failure. As the expert Hugh Griffiths himself admits - "there are plenty of arms out there - so long as you have the money to pay for it."

Thursday, October 23, 2008

A German publisher has reported that, with the current economic and financial crisis, sales of Marx’s Das Kapital have tripled. No doubt sales of Francis Fukuyama’s book about “the end of history” have ceased. This is understandable as Marx’s description and criticism of how capitalism works is still the best there is, while the apologists for capitalism don’t know what’s hit them. Their theories and justifications are in tatters.

Those who read the book will indeed find, amongst much else, an explanation as to why crises are both possible and unavoidable under capitalism.

Early on, in the chapter on money, Marx identifies the possibility of crises – as interruptions in production – precisely in the fact that things are bought and sold for money. “There is”, he writes, “a contradiction immanent in the function of money as the means of payment . . . This contradiction bursts forth in that aspect of an industrial and commercial crisis which is known as a monetary crisis. Such a crisis occurs only where the ongoing chain of payments has been fully developed, along with an artificial system for settling them” (Penguin edition, pp. 235-6).

Later, when he comes to examine industrial capitalism, he notes:

“The factory system’s tremendous capacity for expanding with sudden immense leaps, and its dependence on the world market, necessarily give rise to the following cycle: feverish production, a consequent glut on the market, then a contraction of the market, which causes production to be crippled. The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation. The uncertainty and instability to which machinery subjects the employment, and consequently the living conditions, of the workers becomes a normal state of affairs, owing to these periodic turns of the industrial cycle”. (pp. 580-1)

And, in answer to the monetarists:

“The superficiality of political economy shows itself in the fact that it views the expansion and contraction of credit as the cause of the periodic alternations in the industrial cycle, whereas it is a mere symptom of them.” (p. 786)

But what the reader won’t find in Das Kapital is any claim that capitalism will automatically collapse of its own accord because of its internal contradictions. Nor will they find any proposed policy measures aimed at preventing or dealing with crises.

Marx was not concerned with how to run capitalism, but about political action by the majority class in society, the class of wage and salary workers, to end it and establish a society based on “co-operation and the possession in common of the land and the means of production produced by labour itself” (p. 929). What earlier on he had described as “an association of free men, working with the means of production held in common, and expending their many different forms of labour-power in full self-awareness as one single social labour force” (p. 171). In other words, a society where production would be under conscious human control and no longer at the mercy of uncontrollable economic forces acting as if they were forces of nature.

He called this society “communist society”, though today the more commonly used term is “socialism”. But it had nothing to do with the failed system of state capitalism that used to exist in Russia and elsewhere. Marx’s communism has never yet been tried.

Because it is based on common ownership and production solely for use, this society would have no need for money or banks or the rest of the financial superstructure. Now there’s an idea worth thinking about – and acting on.

Wednesday, October 22, 2008

The US election is a choice between Tweedledum and Tweedledee. According to the FSP howevervoters should consider candidates from three 'pro-worker' parties. They are, as we will see, socialist in name only. The 'Socialist Party' calls for 'the radical transformation of society' yet reformist blinkers limit its vision to nationalisation and other such schemes popular with capitalism's left wing. The Socialist Workers Party is also put forward for consideration, but is criticised for being weak on gay rights. Calling for a minimum wage and job creation is no way to end the wages system. Two members of the Party for Socialism and Liberation are pictured in front of a banner proclaiming 'revolution is the cure'. Indeed, but such will not come as a result of the "party's opportunist and anti-democratic tendencies" or its call to end home foreclosures and police brutality. The Freedom Socialist Party does get something right, it urges workers to vote "to register protest against war, poverty, and the for-profit system". Yes, workers in the US seeking revolutionary change are encouraged to register their protest vote for WORLD SOCIALISM and contact the only genuine socialist party there.

Monday, October 20, 2008

Socialists have long argued we live in a world of abundance, one which can meet the self-defined needs of every man, woman and child. What then are we to make of a recent New Scientist special report titled 'How our economy is killing the Earth'? Firstly, the term 'our economy' should be viewed in the same light as 'our country' or 'our war'. Capitalist economics sees human wants wants as unlimited, and abundance as impossible. According to the New Scientist, an increasing number of 'experts' (presumably no economists) argue "..that personal carbon virtue and collective environmentalism are futile as long as our economic system is built on the assumption of growth. The science tells us that if we are serious about saving Earth, we must reshape our economy." Yes, we must not be misled into the dead end of reformism, green or otherwise, and instead replace the present economic system of production for profit with global Socialism - a world of free access.

Saturday, October 18, 2008

Writing is today’s Daily Torygraph, he begins by buttering up his Tory readers assuring them that he too is pro-capitalist:

“I admire the market's ability to release the dynamism and enterprise of people and so this new Labour government is pro-business and pro-markets and always will be.”

He then goes on to say that he doesn’t believe in “unbridled free markets” (a rather odd term since if something is “free” then surely it is “unbridled” ?). So he wants to “bridle” free-market capitalism (not that he dares to use the c-word) . . . by ethics, those his father preached as a Presbyterian minister in the local kirk: “fairness, stewardship cooperation” :

“Markets work best when underpinned by an ethic of fairness. The institutions of the market place need to be founded on the ethic of stewardship. And this new interdependent global economy cannot work for the world's people without an ethic of cooperation.”

Markets certainly can and do work without being underpinned by any “ethic” save that of getting the best price and making the most money. They are completely impersonal and work according to the principles of “can’t pay, can’t have” and “no profit, no production”. If Brown thinks his appeal to market operators to apply Presbyterian ethics in their dealings will be heeded he’s just a fool. How in fact this man has achieved a reputation for being a financial and economic genius is hard to understand. His claim to have engineered the end of boom-and-bust cycles has just blown up in his face as Britain and the rest of the world are now faced with the biggest bust for 80 years. And now he is proposing “ethical markets” as the way out.

His “ethical market economy” will go down in history as a joke to rival the “ethical foreign policy” preached by his fellow Scotsman, the late Robin Cook.

Thursday, October 16, 2008

Billion$ have been lost, governments falter, cities close but capitalism will not collapse. Indeed in some regards it is business as usual. And businesses concerned with booting people out of 'their' homes or bombing them are booming. Yes, just ask any arms trader and they will say killing is my business and business is good. Boom or bust, billions suffer and millions starve: every two years more people die of starvation and diseases than in the whole of World War II. Take Burundi, for example, where according to the UN's latest report, about a million of children under five years of age suffer from chronic malnutrition. Some two-thirds of the 7,600,000 people there suffer with dire poverty. 300,000 were murdered during 14 years of conflict. Children are conscripted and sold for sex. AIDS is rife. The activities of charities and NGOs prolong such suffering. They attempt to treat symptoms, not the disease. History shows this again and again: "The futility of trying to make the present system work is best revealed in the present instance by remembering Henry Kissinger's promise to the World Food Summit some 25 years ago. There were then 400 million chronically malnourished, a 75 million increase over the previous ten years, and Kissinger vowed world hunger would be eradicated within the next decade. That number has since doubled, and with the best efforts the experts believe the statistics will not improve in the next 25 years." (Socialist Standard, July 1998)

Tuesday, October 14, 2008

Che was clearly MAD: just one year after the Cuban missile crisis he said "the people [of Cuba] you see today tell you that even if they should disappear from the face of the earth because of an atomic war is unleashed in their names...they will feel completely happy and fulfilled"! Another 'icon', Malcolm X, the black nationalist leader who suggested that the “black community” would be better off if blacks ran their own economy, that is be less exploited serving black masters than white ones, was also patently MAD. When in 1964 China successfully detonated its first atomic bomb he described this event as “the greatest thing that has ever happened in the 20th century to the black people”. Readers might be tempted to seek comfort in the knowledge that these two MAD men are long dead. Surely, as we said at the time, "no one in his right mind can view other than with horror the fact that yet another threat to his life is looming on the horizon"? Alas, MADness lives on - earlier this month a group of eighty or more people heard one speaker quote Malcom X approvingly and talk "of the great joy felt not only by the Chinese people but by the oppressed people of the whole world" when China's first A-bomb exploded. Hands off China! Hands off Zimbabwe! Congratulations to the DPRK! [SIC!] Enough!

Sunday, October 12, 2008

With the banks refusing to lend to each other the flow and circulation of global capital is being disrupted on scale not seen since the depression of the 1930’s. Share values have declined and major financial concerns are under pressure from the credit crunch. There have been massive bail-outs and buy-outs or state intervention and nationalisation in an effort to save the situation for capitalism. But whatever happens the short-term prospects for capitalism globally look bleak now that the consumer bubble fed by easy credit has finally burst.

The only course of action now open to the powers that be is to get us to tighten our belts till the economy starts picking up. How long this will take is anybody's guess for in the cutthroat world of competition the market determines who survives and who goes under. What is clear is that millions of workers will be unemployed. And consequently poverty will increase, health will deteriorate, homelessness will grow, deprivation and destitution will accelerate, crime will multiply and, in the so-called Third World, food riots become a regular occurrence.

This is nothing new because throughout the history of capitalism there is only one course of action available. In short - no profit no production. However, despite what the supporters of capitalism would have you believe there is one course of action available to the workers. The capitalist class won’t even contemplate it because it means a future without profits, private and state ownership, borders, money and inequality.

Saturday, October 11, 2008

It would be hard to imagine any assortment of lunatics devising a scheme for organising the political and economic affairs of humankind that would be more absurd than the system of world capitalism, currently exposed in all its rottenness.

Outside its appalling boom-slump syndrome (which currently and conclusively demonstrates that it is beyond the control of its alleged experts, its politicians, the capitalists themselves and their agents) it gives us wars, world hunger, insecurity, alienation and the monumental waste which now threatens the entire biosphere.

Historically, capitalism, despite it inherent evils, played a progressive role in that it banished feudalism and made the means of production social. Today its lunacies are simply an embargo on the rational production of goods and services. Real wealth is produced, and can only be produced, by the application of human labour-power to nature-given resources. The claims to ownership of the latter by a relatively small class of money shufflers derives from the historic usurpation of those means.

We, the working class, the producers of all real wealth, now have the power in our numbers to democratically reject the spurious claims of ownership of our means of life. With the political will we can create a world where goods and services will be used to provide the needs of humanity rather than accumulating even more wealth for an economically redundant class of parasites.

Friday, October 10, 2008

What day is it today? Yes, it's Friday but also 'World Day Against Death Penalty'. In fact, the year is peppered with such days. Many of them focus on specific problems endemic to capitalism, such as racial discrimination (21 March), various readily preventable poverty-related diseases (eg malaria, 25 April), child labour (12 June), refugees (20 June), torture, corruption, etc. Pure, misleading, myopic reformism day after day. This is not to say that Socialists consider such issues irrelevant. We are, for example, against capital punishment yet will not join such single issue campaigns. Those for or against are equally short-sighted. The vast majority of people who kill are not executed: a soldier is a hero if he does so in uniform, but labeled a murderer if he takes lives when dressed in civilian clothes. Similarly, the food producers who, with their profits in mind, destroy vast amounts of edible material in a world where millions starve to death are in no danger of being strung up, electrocuted, gassed, shot or given a lethal injection. Every execution shows that the death penalty is no deterrent. "Neither the reintroduction of capital punishment, nor its continued absence from the options available to courts, will lead to a murder-free society. Crime has roots in the social relationships of this system and will pass when this society is ended. The argument...is imbued with, and distorted by, a morass of emotions. In its proper context, we should see that in innumerable ways, all the time, capitalism kills; it is a social system unfit for human habitation." (Socialist Standard, August 1983)

Thursday, October 09, 2008

Two days ago in an irrelevant debate, John McCain made use a vaguely amusing simile:

"Nailing down Senator Obama's tax proposal is like nailing Jello to the wall" .

Much the same could be said of anarchism. Not the anarchy of the market system, supported by Obama & McCain Inc. (and, it has to be said, the vast majority of workers throughout the world), rather anarchy "as a general term for a group of diverse and often contradictory ideologies. All strands of anarchist thought, however, tend to see the source of human oppression and exploitation in external authority in general and the state in particular. Socialists, on the other hand, see oppression and exploitation in the social relationships of capitalism (which includes the state). There is a superficial resemblance between anarcho-communists and socialists – but it is superficial. All anarchists agree that the working class cannot (or should not) organise consciously and politically to capture state power, preferring instead either insurrection or ignoring the state.". (An A-Z Of Socialism) Much more could be said about this topic. Indeed, why not take a seat and listen to this.

Wednesday, October 08, 2008

It would be hard to imagine any assortment of lunatics devising a scheme for organising the political and economic affairs of humankind that would be more absurd than the system of world capitalism, now exposed in all its rottenness.

Outside its appalling boom-slump syndrome (which currently and conclusively demonstrates that it is beyond the control of its alleged experts, its politicians, the capitalists themselves and their agents) it gives us wars, world hunger, insecurity, alienation and the monumental waste which now threatens the entire biosphere..

Historically, capitalism, despite it inherent evils, played a progressive role in that it banished feudalism and made the means of production social. Today its lunacies are simply an embargo on the rational production of goods and services. Real wealth is produced, and can only be produced, by the application of human labour-power to nature-given resources. The claims to ownership of the latter by a relatively small class of money shufflers derives from the historic usurpation of those means.

We, the working class, the producers of all real wealth, now have the power in our numbers to democratically reject the spurious claims of ownership of our means of life. With the political will we can create a world where goods and services will be used to provide the needs of humanity rather than accumulating even more wealth for an economically redundant class of parasites.

Friday, October 03, 2008

We've blogged about Jack London before and would not label him a Socialist. This does not mean however that he failed to make pertinent points in his writing. Here, as a follow up to yesterday's post, is London writing about charity:"I had become convinced as Ernest was when he sneered at charity as the poulticing of an ulcer. Remove the ulcer was his remedy; give the worker his product; pension as soldiers those who grow honourably old in their toil, and their will be no need for charity. Convinced of this, I toiled with him at revolution, and did not exhaust my energy alleviating the social ills that continuously arose from the injustice of the system."

Thursday, October 02, 2008

"A retired judge, Sir Holman Gregory, is writing articles on crime for the Sunday Dispatch....he admits that some workers commit crimes because their lives when at 'liberty' are worse than in prison:- Their lives when free are so drab and cheerless that a few months' imprisonment with regular food, under the care of a medical officer, is a relief. "

The above is taken from the September 1938 Socialist Standard. Over seventy years later, long after the Dispatch's demise, some workers exist in such intolerable conditions that life in prison is considered preferable. The recent news item titled Turkish beggars plead for return to jail in Spain is just one example of many. More and more of the have nots are being imprisoned. Millions more die every year of poverty-related causes in this world of abundance. Even the most basic needs of many go unmet, and this despite the explosion in the number of charities. But this is to be expected, as the penal system and the charity industry deal with effects, not causes. News that these bedfellows are becoming even more entwined should come as no surprise. Take for example the report last month titled Charities bid to help build prisons.

For all the well-intentioned but misguided effort that goes into charity, the task, it has to be realised, is Sisyphean. Only in a Socialist world will both these permanent features of capitalism be cast into the dustbin of history.

Wednesday, October 01, 2008

The depth of the malaise facing the UK housing market was amplified by a research note by Dresdner Kleinwort. This follows the revelation that mortgage approvals from August this year were 98 per cent lower than at the same time the previous year. Dresdner has been researching the situation in the midlands and north of England, stating:

"We believe quoted housebuilders could be forced to issue early profit warnings and are in danger of widespread breaches of banking covenants. The turmoil in the banking sector looks almost certain to take lending to a new low and deter would-be buyers indefinitely, in our view." They reported a fall of between 45%-50% in the average prices of urban apartments, with virtually no volume at all, saying "many developers have gone bust and land in many cases appears to be worthless".

This is the real overproduction for available (paying) demand that lies behind the financial turmoil in the US, UK and elsewhere. The panic on the financial markets is but a reflection of this deeper underlying cause. While the media tend to focus on stock market movements the real issue lies elsewhere - the effect of toxic mortgage-based financial instruments on the money markets. Banks have all but stopped lending to one another - so wary are they of one another's hidden toxic debt - and the three-month London Inter-Bank Offered Rate (Libor) was yesterday at 6.26 per cent, a full 126 basis points above base rates of 5 percent, when the two are usually closely matched. there was a similar mismatch with Euro-Libor and Dollar-Libor.

Yesterday's stock market declines (over 8.5 per cent on the S & P 500 in the US, which is the most reliable index there) were serious too, though the impact of this isn't likely to be nearly as catastrophic for industry as the near-collapse of the credit markets.

In capitalism, asset classes compete for capital investment, driven by the law of value. Over the last 10 years or so since the peak of the dot-com bubble money has poured into property and real estate instead of stocks, leading to a bubble in the former and underperformance in the latter.

Currently, most stock markets are hugely undervalued when seen this way; the best way to see this is to invert the p/e ratio - the (share) price to earnings (profits) ratio for the market as a whole - to give an earnings yield. It is currently over 9 per cent in the UK and rising, while property yields and bond yields are barely half as much, and falling. This sort of gap happens very rarely in history.

This is almost certainly the reason why despite all the mammoth shocks to the system in recent weeks and months (some of which are unprecedented in the entire history of capitalism) the stock markets go down so far but keep bobbing back up again as if an invisible string is tugging them back higher. If it wasn't for this effect, it is likely the plunges on the markets would be more akin to the secondary banking crisis in 1973-4 (which also followed a property bubble) when the UK stock market lost over 70 per cent of its value (as opposed to just under 30 per cent at the time of writing today).

Quite what stage of the bear market recent events prove to be, it is hard to tell, even if some contend that they have all the hallmarks of the sort of 'final capitulation' that marks the bottom (or at least close to it). What is certain though is that the real lifeblood of capitalism's financial apparatus is the money markets. And these are infected with a serious virus for which there is no effective outside antidote, only an internal purging mechanism instead, as banks go bust or swallow one another up.